Al and Bill Are the Only Workers in a Small

question 16

Multiple Choice

Al and Bill are the only workers in a small factory that makes geegaws and doodads.Al can make 5 geegaws per hour or 10 doodads per hour.Bill can make 4 geegaws per hour or 24 doodads per hour.Assuming that neither of them finds one task more odious than the other,

• A)Bill has a comparative advantage in producing geegaws and Al has a comparative advantage in producing doodads.
• B)Bill has a comparative advantage in producing both geegaws and doodads.
• C)Al has a comparative advantage in producing geegaws and Bill has a comparative advantage in producing doodads.
• D)Al has a comparative advantage in producing both geegaws and doodads.
• E)both have a comparative advantage in producing doodads.

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Definitions:

Break-Even

The point at which total costs equal total revenue, indicating that a business is neither making a profit nor a loss.

Monthly

Monthly pertains to something occurring or being done every month or once a month.

Dollar Sales

The total revenue generated from the sale of goods or services, calculated in dollar terms.

Break-Even

A financial situation in a business where the income equals the costs, leading to neither profit nor loss.